It always used to be said that there were only two certainties in life: death and taxes. Sadly, I think you can add a third, war. The conflict in the Middle East and the UK’s recent inheritance tax (IHT) reforms are shaping a more uncertain and potentially inflationary environment for the agricultural land and farm market. Together, these forces are influencing everything from input costs and market sentiment to long‑term succession planning.
The war in the Middle East is disrupting energy markets and have contributed to higher oil prices. Rising fuel and fertiliser costs place direct pressure on farm profitability, particularly for arable and mixed enterprises that rely heavily on energy‑intensive inputs.
Conversely higher geopolitical risk often pushes investors toward tangible assets such as land and gold which could increase demand for UK farmland as a perceived safe haven. We saw this post Covid and following the onset of the war in Ukraine. However, elevated borrowing costs and inflationary pressures may temper this demand.
Changes to the Inheritance Tax rules for Agricultural Property Relief (APR) and Business Property Relief (BPR) came in on the 6th April 2026 restricting the combined reliefs to £2.5 million. These changes, and predominantly the fact that the combined relief is capped, could affect as many as 75% of farms which are over 150 acres in the UK
Since then, Valuers have received only a trickle of instructions for Inheritance Tax valuations which are required to enable solicitors to complete probate applications and allow the distribution of the estate to beneficiaries. This is not unusual as there is often a significant lag between a death and the executors getting around to instructing valuers.
Our firm has received just a handful of valuations under the new rules so far, but it is already clear that some accountants and solicitors do not realise that formal valuations of live and dead farming stock are likely to be required. Under the previous rules HMRC allowed “book value” or “written down value” to be used, taken off the accounts, as in nearly all cases the farming stock would get 100% relief regardless of value.
However, under the new rules, with restricted reliefs, the value of farming stock is much more likely to be relevant to a tax calculation. “Book value” in the accounts is generally much lower than the likely sale price, therefore a true current market value is almost certainly going to be required. We have already had to explain this to several instructing solicitors who had not appreciated the nuance. Barbers Rural are unusual in that we have a team of expert valuers who can value not only houses, farms and land, but also livestock, machinery, growing crops and any other farming assets.
The interaction of geopolitical instability and tax reform is likely to reshape market behaviour in several ways. Firstly, there will be further pressure on succession planning. We have already seen this over the past 12 months and it may accelerate transfers of land or restructuring of ownerships to manage future tax liabilities. Secondly, it could lead to a potential rise in supply. Some landowners may bring farms to market earlier than planned in the face of reduced reliefs.
Meanwhile investor interest in land as a stable asset may counterbalance tax‑driven sales, sustaining or even increasing prices in some regions.
Overall, I expect greater financial strain on smaller farms, particularly those with significant borrowing and high capital values but modest income.
Looking ahead, the market is entering a period of flux. While geopolitical tensions may ease over time, the IHT reforms are structural and will require long‑term planning. Professional advice will be essential for landowners navigating these changes.